IRS Warnings During Peak Filing Season

Each year, the IRS publishes its “Dirty Dozen” list of tax scams. This week, the IRS warned taxpayers to avoid “phishing scams” and not to falsify income or make frivolous arguments.

As of February 18, the IRS reports that there is a 400% increase in “phishing” emails. The email scammer attempts to trick taxpayers into thinking that this is an official inquiry about their tax refund or filing status.

IRS Commissioner John Koskinen noted, “This dramatic jump in these scams comes at the busiest time of tax season. Watch out for fraudsters slipping these official-looking emails into inboxes, trying to confuse people at the very time they work on their taxes. We urge people not to click on these emails.”

There are two major risks in clicking on email links from a scammer. First, the link may take you to an “official-looking” website and attempt to gain access to your Social Security Number, bank account numbers or other financial information.

Second, the link may load “malware” on your computer. This is a program that gives a hacker access to your computer and may lead to disclosure of your banking or other personal information.

If you receive a suspicious email, do not click on links. Forward the email to phishing@irs.gov. There also is a “Report Phishing and Online Scams” page on www.irs.gov that has extensive helpful information.

When the IRS receives a phishing email, it will work with state and local law enforcement to apprehend the tax scammers.

Koskinen urges taxpayers to watch out for suspicious email subject lines. Some of the phishing email subject lines include phrases such as “Your tax refund,” “Your W-2” or “Order your tax transcript.”

A second IRS warning is to avoid claiming improper tax credits by falsifying income. This action could lead to civil penalties and even tax prosecution. It may be encouraged by unscrupulous tax preparers.

Koskinen cautions, “Taxpayers should not falsify their income or other information on their tax returns to improperly claim tax credits. Misrepresenting facts is cheating and taxpayers are legally responsible for all the information reported on their returns.”

The IRS website also includes a note with a title “The Truth about Frivolous Tax Arguments.”

Some tax scammers tell individuals that they may avoid payment of all tax by claiming a First Amendment exemption based upon their religious status or their moral beliefs. The tax scammer claims that the person may use one of these strategies to avoid payment of all tax.

There are valid exemptions from income tax for qualified religious and other nonprofit organizations. However, these exemptions do not apply to individual taxpayers.

The frivolous claim that you are not subject to income tax for any of these reasons may subject you to back taxes, interest and penalties. Repeat offenders who are classified as tax protesters may even face criminal action by the federal government.

Koskinen reminds taxpayers that the “Dirty Dozen” tax scams are published each year by the IRS. The goal of this publicity is to protect taxpayers from abusive promoters and to reduce your potential tax return errors.

Information provided courtesy of Bianchi Kasavan & Pope, LLP in California.

Related articles/information on IRS website:

Consumers Warned of New Surge in IRS E-mail Schemes during 2016 Tax Season; Tax Industry Also Targeted

IRS Wraps Up the “Dirty Dozen” List of Tax Scams for 2016

Report Phishing and Online Scams [to IRS]

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